Khasab was formerly infamous as the epicentre of the Oman–Iran contraband trade, thanks to its strategic location at the tip of the Arabian peninsula, just 45km from Iran across the Straits of Hormuz – a mere 45 minutes by speedboat. Up until 2001, taxes on US goods in Iran encouraged a flourishing trade in smuggling, with as many as five thousand Iranian boats visiting Khasab daily, arriving laden with boatloads of goats destined for the slaughterhouses of RAK and returning across the Straits of Hormuz weighed down with consignments of tea, electronics and, especially, cigarettes. Locals describe the golden age of smuggling as “Marlboro Time”, and the sight of thousands of Iranian speedboats loading up with piles of duty-free fags was formerly a tourist attraction in its own right. The smuggling trade also provided a major source of income for locals in Khasab, who provided transport and other logistical services – accounting for the extraordinary number of pick-up trucks around town, formerly used to shift vast quantities of contraband tobacco and other goods down to the waiting boats.
Since 2001, successive changes in customs regulations in Iran and the UAE have led to the virtual demise of smuggling in Khasab. Cigarettes are now exported legally from Jebel Ali Free Port in Dubai, while the goats with which the Iranians formerly made themselves welcome are delivered directly to Ras al Khaimah in the UAE. The town still sees a fair number of Iranian traders even so – perhaps two or three hundred boats a day – although they now come to buy up electronics and surplus household appliances for resale in Iran, an entirely legal activity, making them shoppers rather than smugglers. They’re granted a 12-hour pass, although they aren’t allowed further into town than the Old Souk (where you’ll often see them loading up trucks with old washing machines, fridges and suchlike) and must leave by sunset – a rather tame legacy of the town’s former customs-busting bravado.